BIG Executive Briefing
Economic & Consumer Insights for Marketing Executives

BIGresearch's Consumer Intentions & Actions Survey monitors over 8,000 consumers each month
providing unique insights & identifying opportunities in a fragmented and transitory marketplace
June 2004 (Respondents surveyed 6/2 - 6/9/04)
   

Talking Points :

·    Employment outlook continues to improve, although job security may be holding confidence back
·    Rising prices at the pump may have more consumers thinking twice before making other purchases

·   Auto dealers, restauranteurs, and entertainers be warned...more consumers deferring purchases in these areas

·   Who's got the cleanest store, most courteous employees, and fastest checkouts?

·   After a close call in May, CVS manages to stay ahead of Wal-Mart in Prescription Drugs

·   Consumer Migration Index: Lowe's a strong #1 in Home Improvement/Hardware

·   Consumers plan to beat the heat this summer by staying indoors with their new home entertainment systems

·    What's hot this month? Brad Pitt's got nothing on Shrek


 

 ECONOMY

 

Looks like rising gas prices have left consumers with a little less confidence in the economy, as sentiment lowers 1.5 points this month to 43.3%.

As the end to U.S.-led occupation of Iraqi draws near, more consumers in June are worrying less about political and national security issues...22.9% continue to be concerned, compared to 24.2% in May.

It seems as though rising prices at the pump may be causing consumers to think twice before making other purchases, as those who say they've become more practical in their purchases up to 45.9% v. 42.9% in May, the highest reading since November 2003.  In addition, more consumers thinking of needs over wants...54.0% say they are doing so v. 51.5% in May, the highest since reaching 54.6% in January.


 

 PERSONAL/FINANCIAL

Consumers continue to view the employment outlook as positive.  Those predicting "more" layoffs over the next 6 months down just over a point to 29.2% (v. 30.4% in May), "same" up almost a point to 51.0% (v. 50.2%), "fewer" up slightly to 19.9% (v. 19.4%).  However, consumers have their own job security on their minds, as concern with becoming laid off up at 5.5% v. 5.0% in May.

Practical consumers planning a tighter grip on their wallets this month as more plan to decrease overall spending , 35.7% (v. 34.2% in May), the #2 financial plan.  Pay down debt again #1, but fewer planning to do so in June...41.1% v. 41.7% in May and the lowest reading since bottoming out at 40.8% in June 2003.  Increase savings (#3) also down, 31.8% v. 32.4% last month.  With more consumers planning to pay with cash more often in June (27.0% v. 25.6% in May), it looks like they'll be doing so at the expense of their savings and debt repayment.

Confidence in Wall Street lowers 3 points in June, with 59.6% of investors saying they will definitely or probably invest in the stock market.  Investors planning to buy stocks within the next 3 months down 2 points to 12.1% in June, while those planning to sell flat at 6.5%.

 

Auto dealers, restauranteurs, and entertainers be warned...you'd better plan to continue the promotions, rebates, and coupons, as more consumers say they're deferring purchases in these areas than in May.  Also more likely to be put off: vacation travel, home improvement projects, and electronics.  And who's doing all of the deferring?  The 18-34 year old crowd is more likely to put off dining out, entertainment, and electronics purchases than those 35+, who are more apt to be putting off vacation travel, home improvement projects, and auto purchases.

 

 

 RETAIL


Who leads the overall pack when it comes to the cleanest store, most courteous employees, and fastest checkouts?  Wal-Mart, of course, with Target #2 in all categories.  Break the top stores out by their classifications, and you'll find that more stores than these 2 have bragging rights as well:

Cleanest Store

Grocery Discount Dept./Specialty
1. Publix 1. Wal-Mart 1. Kohl's
2. Albertsons 2. Target 2. Sears
3. Safeway 3. Meijer 3. JC Penney

Most Courteous Employees

Grocery Discount Dept./Specialty
1. Publix 1. Wal-Mart 1. Home Depot
2. Safeway 2. Target 2. Lowe's
3. Kroger 3. Meijer 3. Best Buy

Fastest Checkouts

Grocery Discount Dept./Specialty
1. Kroger 1. Wal-Mart 1. Home Depot
2. Publix 2. Target 2. Lowe's
3. Safeway 3. Meijer 3. Sears









Good look, great value has become the fashion mantra of 18-34 year olds consumers...42.2% of this crowd say familiar labels are important (compared to 31.8% of those 35+) and 19.3% favor newest trends and styles in clothing (v. only 4.5% of those 35+).  But don't assume that younger shoppers don't know a good buy when they see it...73.5% say they usually buy their clothing on sale (v. 63.7% of those 35+) and only 8.8% (v. 12.2% for 35+) say that sales aren't important.

 

Keeping the above in mind, it's easy to see why discounters make the Top 5 in both Women's and Men's Clothing, with discount king Wal-Mart leading in both categories by a wide margin.  Kmart makes a small move from #6 to #5 in Women's: 1. Wal-Mart, 2. JC Penney, 3. Kohl's, 4. Target, 5. Kmart; while Men's Clothing remains unchanged: 1. Wal-Mart, 2. JC Penney, 3. Kohl's, 4. Sears, 5. Kmart.  Discount specialty store Payless tops Wal-Mart this month in Shoes, as the Top 5 is the same as May: 1. Payless, 2. Wal-Mart, 3. Kmart, 4. JC Penney, 5. Kohl's.

After a close call in May, CVS manages to stay ahead of Wal-Mart in Prescription Drugs...(Perhaps more practical consumers are finding value in CVS's "ExtraCare" savings program?)  The rest of the Top 5 remains unchanged from May (share percentage in parenthesis): 1. Walgreens (14.9%), 2. CVS (9.6%), 3. Wal-Mart (8.9%), 4. Rite Aid (5.7%), 5. Eckerd (4.6%).

Home Depot and Lowe's continue to dominate the Home Improvement/Hardware category, followed by Wal-Mart, Menards, and Ace Hardware...perhaps it's because these specialty superstores are able to provide consumers with what their smaller competitors can't: good prices and great selection, the Top 2 reasons they cite to shop a particular store for home improvement/hardware items.  Location, quality, and service follow.

Home Depot leads Lowe's in the Hardware category with 35.5% share of consumers who say they shop there most often to 22.8%, but don't count out the #2 retailer yet...check out this month's Consumer Migration Index, which tracks those who have immigrated to a store (the new customers within the past year) against those who have emigrated (left within the past year), and you'll find that Lowe's has been gaining customers over the past year, while Home Depot has been losing them.  According to the MI Index this month (where a positive rating - new customers outnumber those who have left - equals net growth), Lowe's is ahead with a +15.3, while Home Depot and Ace Hardware fall short with -7.2 and -6.6, respectively...Wal-Mart relatively flat with -1.6.  Here's the full view of who's "In" and who's "Out":


FUTURE PURCHASES

Looks like consumers are planning to beat the heat this summer by staying indoors with their new home entertainment systems...6 month purchase intentions are up in June for TV and DVD/VCR.  Digital camera, computer, autos, home appliances, jewelry/watch, house, RV/boat, and vacation travel flat, while furniture and stereo equipment down in June.

Consumers may be putting off home improvement purchases (see "Personal/Financial" section), but almost 1/5 (19.7%) are planning fix-ups for the home in the next 6 months.  And the Top 5 rooms consumers are planning to improve? 1. Kitchen, 2. Bathroom, 3. Deck/Porch, 4. Bedroom, 5. Living Room.  However, not all consumers are ambitious do-it-yourselfers...that all depends on how much they're willing to spend:



With 20.7% of consumers became likely to cut back on apparel expenditures through July 4th as a result of rising gas prices, this helps explain why the 90 Day Outlook for clothing categories are down this month, according to the BIGresearch Diffusion Index.  (Those who say they will spend less subtracted from those who say they will spend more).  Lawn & Garden supplies begins its seasonal decline, but kids should be pleased...Toys are up from May and June 2003:

Retail Merchandise Categories - 90 Day Outlook
(June 04 compared to May 04 and June 03)
Category May. 04 June 03 Category May 04 June 03
Children's FLAT DOWN Toys and Games UP UP
Women's Dress DOWN DOWN CDs/DVDs/Videos/Books DOWN DOWN

Women's Casual

 DOWN DOWN Electronics DOWN FLAT
Men's Dress DOWN UP (slightly) Groceries FLAT DOWN
Men's Casual DOWN DOWN Home Improvement DOWN DOWN
Shoes DOWN FLAT Lawn & Garden DOWN UP
HBA DOWN FLAT Home Furniture DOWN UP
Dining Out DOWN FLAT Decorative Home Furnishings DOWN UP
Sporting Goods DOWN UP Linens/Bedding/Draperies DOWN UP

 

ON THE LIGHTER SIDE...What's Hot and What's Not 


Brad Pitt's got nothing on Shrek...80% declared that this (lovable?) green ogre's hit summer sequel , Shrek II, is what's hot this month.  However, don't count out the Troy star yet, as Pitt naturally rates pretty high with the 18-34 year old crowd, along with tank tops with lacy insets, stiletto sandals, and tango dresses.  Comfort is the name of the game when it comes to shoes for the 35+ crowd, as the majority here feel that flats are hot.  Funny woman Ellen DeGeneres also ranked higher with the more mature group.  And, although more popular with those 18-34, Queer Eye for the Straight Guy and Instyle magazine were pretty cool across the board.

 

 

Sincerely,
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